Item 1.01 Entry into a Material Definitive Agreement.
On January 12, 2022, VYNE Therapeutics Inc. ("VYNE" or the "Company") entered
into an Asset Purchase Agreement (the "Purchase Agreement") with Journey Medical
Corporation ("Journey") pursuant to which VYNE has divested its Molecule
Stabilizing Technology (MSTTM) franchise, including AMZEEQ®, ZILXI®, and FCD105,
to Journey (the "Sale"). Journey has acquired, among other things, the
intellectual property related to the MSTTM assets, inventory as of closing, and
VYNE's rights and obligations under the license agreement with respect to the
greater China territory. In addition, Journey has agreed to assume certain
liabilities, including, among others, those arising from VYNE's patent
infringement suit initiated against Padagis Israel Pharmaceuticals Ltd. The Sale
was consummated concurrently with the execution of the Purchase Agreement.
Pursuant to the Purchase Agreement, Journey will pay VYNE an upfront payment of
$20.0 million and will pay an additional $5.0 million on the one-year
anniversary of the closing of the transaction. VYNE is also eligible to receive
sales milestone payments of up to $450.0 million in the aggregate upon the
achievement of specified levels of net sales on a product-by-product basis,
beginning with annual net sales exceeding $100,000,000 (with products covered in
three categories (1) AMZEEQ® (and certain modifications), (2) ZILXI®(and certain
modifications), and (3) FCD105 and other products covered by the patents being
transferred, including certain modifications). In addition, VYNE is entitled to
receive certain payments from any licensing or sublicensing of the assets by
Journey outside of the United States.
The Purchase Agreement includes customary representations and warranties, as
well as indemnification rights for breaches of representations, warranties, and
covenants, as well as certain other matters, subject to customary deductibles,
caps, and other limitations.
The above description of the Purchase Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the Purchase
Agreement, a copy of which is filed with this report. The representations,
warranties, and covenants contained in the Purchase Agreement have been made
solely for the purposes of the Purchase Agreement and as of specific dates; were
solely for the benefit of the parties to the Purchase Agreement; are not
intended as statements of fact to be relied upon by the parties' stockholders or
other security holders, but rather as a way of allocating the risk between the
parties in the event the statements therein prove to be inaccurate; have been
modified or qualified by certain confidential disclosures that were made between
the parties in connection with the negotiation of the Purchase Agreement, which
disclosures are not reflected in the Purchase Agreement itself; may no longer be
true as of a given date; and may apply standards of materiality in a way that is
different from what may be viewed as material by stockholders or other security
holders. Security holders are not third-party beneficiaries under the Purchase
Agreement and should not rely on the representations, warranties, and covenants
or any descriptions thereof as characterizations of any actual state of facts or
of the condition of the Company. Moreover, information concerning the subject
matter of the representations and warranties may change after the date of the
Purchase Agreement, which subsequent information may or may not be fully
reflected in the Company's public disclosures.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The Sale was consummated concurrently with the execution of the Purchase
Agreement. The information included in Item 1.01 above is incorporated by
reference in this Item 2.01.
The required pro forma financial information for the transaction described in
Item 1.01 of this Current Report on Form 8-K will be filed by an amendment to
this Current Report on Form 8-K as soon as practicable and no later than the
required filing date.
Item 8.01 Other Events
On January 13, 2022, the Company issued a press release announcing the entry
into the Purchase Agreement. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
As of December 31, 2021, the Company had approximately $63 million of cash, cash
equivalents and restricted cash on a pro forma basis following the Sale. This
amount reflects (i) the Company's cash and cash equivalents on an actual basis
as of December 31, 2021, (ii) the net proceeds received from the Sale following
the payment of transaction costs and (iii) the $5.0 million payment to be
received on January 12, 2023. As previously disclosed, the Company expects its
cash-related operating expenses to be approximately $40 million for the fiscal
year ending December 31, 2022.
The financial information included above has been prepared by, and is the
responsibility of, VYNE management. No independent registered public accounting
firm has audited, reviewed, compiled or applied agreed-upon procedures with
respect to this financial information. Accordingly, no independent registered
public accounting firm expresses an opinion or any other form of assurance with
respect thereto. These estimates were prepared by our management, based upon a
number of assumptions, and could change as a result of further review. In
particular, the preparation of our annual report on Form 10-K for the fiscal
year ended December 31, 2021 could result in changes to this preliminary
financial information, and such changes may be material.
This report includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, but not limited to,
statements regarding the transaction between VYNE and Journey and other
statements regarding the future expectations, plans and prospects of VYNE. All
statements in this press release which are not historical facts are
forward-looking statements. Any forward-looking statements are based on VYNE's
current knowledge and its present beliefs and expectations regarding possible
future events and are subject to risks, uncertainties and assumptions that could
cause actual results to differ materially and adversely from those set forth or
implied by such forward-looking statements. These risks and uncertainties
include, but are not limited to: Journey's ability to achieve the levels of the
net sales specified in the Agreement and lack of obligations to achieve any such
net sales milestones and VYNE's ability to realize any related milestone
payments; the risk that Journey may not license or sublicense any territory
outside of the United States and therefore may not owe any additional related
payments to VYNE; VYNE's ability to successfully develop its product candidates;
the timing of commencement of future non-clinical studies and clinical trials;
VYNE's ability to successfully progress, complete, and receive favorable results
in, clinical trials for its product candidates; VYNE's ability to select a lead
candidate and exercise its exclusive option with respect to an oral BETi
candidate pursuant to the terms of the option agreement with In4Derm Limited in
the anticipated timeframe or at all; VYNE's intentions and its ability to obtain
additional funding, either through equity or debt financing transactions or
collaboration arrangements; disruptions related to COVID-19 or another pandemic,
epidemic or outbreak of a contagious disease on the ability of VYNE's suppliers
to manufacture and provide materials for its product candidates, initiating and
retaining patients in clinical trials, operating results, liquidity and
financial condition; the regulatory approval process for VYNE's product
candidates, including any delay or failure in obtaining requisite approvals;
VYNE's ability to comply with various regulations applicable to its business;
VYNE's ability to create intellectual property and the scope of protection it is
able to establish and maintain for intellectual property rights covering its
product candidates, including the projected terms of patent protection; risks
that any of VYNE's patents may be held to be narrowed, invalid or unenforceable
or one or more of VYNE's patent applications may not be granted and potential
competitors may also seek to design around VYNE's granted patents or patent
applications; VYNE's ability to attract and retain key scientific or management
personnel; VYNE's expectations regarding licensing, business transactions and
strategic operations; VYNE's future financial performance, operating expenses
and liquidity; and volatility in VYNE's stock price may result in rapid and
substantial increases or decreases in the stock price that may or may not be
related to the company's operating performance or prospects. For a discussion of
other risks and uncertainties, and other important factors, any of which could
cause VYNE's actual results to differ from those contained in the
forward-looking statements, see the section titled "Risk Factors" in VYNE's
Annual Report on Form 10-K for the year ended December 31, 2020, as well as
discussions of potential risks, uncertainties, and other important factors in
VYNE's subsequent filings with the U.S. Securities and Exchange Commission.
Although VYNE believes these forward-looking statements are reasonable, they
speak only as of the date of this announcement and VYNE undertakes no obligation
to update publicly such forward-looking statements to reflect subsequent events
or circumstances, except as otherwise required by law. Given these risks and
uncertainties, you should not rely upon forward-looking statements as
predictions of future events.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The required pro forma financial information for the disposition described in
Item 1.01 of this Current Report on Form 8-K will be filed by an amendment to
this Current Report on Form 8-K as soon as practicable and no later than the
required filing date.
(d) Exhibits
The following exhibits are being filed herewith.
Exhibit No. Description
2.1* Asset Purchase Agreement, dated as of January 12, 2022, by and
between VYNE Therapeutics Inc. and Journey Medical Corporation.
99.1 Press Release dated January 13, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy
of any omitted exhibits or schedules upon request.
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